Texas Senate Bill SB1372

Texas 2009 - 81st Regular

Caption

Relating to withdrawal and restriction plans for certain insurers.

Impact

The legislation is set to impact the operational practices of insurers significantly. By establishing a clearer process for insurers wishing to restrict business, SB1372 seeks to enhance oversight by regulatory authorities, thereby ensuring that decisions made by insurers are in line with the best interests of state residents. Additionally, the amendments include provisions that prevent insurers from increasing the number of policies that offer lesser coverage than what has been historically provided. This aims to uphold minimum standards of coverage for policyholders, creating a more robust insurance market framework.

Summary

SB1372 addresses the regulatory framework surrounding withdrawal and restriction plans for certain insurers within the state of Texas. The bill aims to amend existing provisions in the Insurance Code that govern how insurance companies can withdraw from writing residential property and personal automobile insurance. One of the key features of the bill is the requirement for insurers to file a proposed restriction plan with the Texas Department of Insurance for review and approval prior to enacting any restrictions on their insurance offerings. This measure is designed to ensure that such actions do not exacerbate coverage shortages or lead to inadequate protection for policyholders.

Contention

In discussions surrounding SB1372, notable points of contention may arise from the potential implications this bill has for insurers’ business models. Some industry representatives may express concerns that the added layers of regulatory scrutiny could hinder their ability to adjust swiftly in response to market demands or catastrophic events. Conversely, consumer advocacy groups may argue that stringent oversight is necessary to protect the public from gaps in insurance coverage during crises, particularly in light of natural disasters that could lead to widespread financial strain for policyholders.